Honeywell Flour Mills Sales Rise, Profit Falls by 35%

Honeywell Flour Mills Sales Rise, Profit Falls by 35%

Honeywell Flour Mills Plc profit falls by 35% year on year to N209 million, according to the company’s unaudited financial statement for nine months in the financial year 2021 posted on the Nigerian Exchange as part of regulatory requirements for listed entities.

Despite the earnings miss, the company share price inched higher to N3.50 on Friday, thus lifting its market valuation to N27.755 billion, data from the Nigerian Exchange shows.

The consumer company which is in bed with rival Flour Mills of Nigeria Plc for acquisition deal records a 22% year on year increase in sales in the same period. Read: Honeywell Share Price Jumps Midday over FMN Acquisition Deal

Detail shows that Honeywell Flour Mills sales edged higher to N99.88 billion, translating to a 22% increase from N82.125 billion reported in the comparable period in 2020.

But costs of sales growth outpaced the associated increase in turnover in the period, thus reducing gross margin even before other overheads were considered.  

The unaudited financial statement shows that Honeywell Flour Mills cost of sales jumped more than 29% year on year to N90.153 billion at the end of the third quarter, from N69.854 billion in the comparable period.

In its segmental report, lower profit in Apapa dotted the company’s bottom line amidst rising costs profile but selling and administrative expenses were well managed.

MarketForces Africa reviews show that costs as a percentage of revenue were more than 92% in Apapa from 86.98%, 82.5% in Ikeja from 76.2%, about 83% in Sagamu from 81.3% last year.

This was further peppered by a higher tax charge.  

Higher tax charged to income statement dotted the topline growth in the period, according to detail from the audited financial statement for the third quarter ended in December 2021.

The company’s profit before tax jumped 48% year on year to N706 million from N476 million in the equivalent period last year.

The company’s tax expenses however advanced 225% year on year to N497 million from N153 million. Relatively weak profitability triggered low earnings per share which printed at N2.64 from N4.07 in the comparable period last year.

Honeywell Flour Mills has N141.017 billion in total assets at the end of the period; financed by a N57.134 billion shareholders fund. #Honeywell Flour Mills Sales Rise, Profit Falls by 35%